Are you freakin’ kidding me? While the District of Criminals has us laser focused on the healthcare takeover and illegal alien amnesty, Ben Bernanke would like to eliminate the minimum reserve requirements because they are a profit drag. Was there or WAS THERE NOT a stress test last year to see if banks had enough reserves to fend off the commercial real estate bubble (my theory for the test)?
Just one more reason that the Federal Reserve Banking Cartel and their mafia boss, Bernanke, have got to go!
In the footnotes of a speech U.S. Federal Reserve Bank Chairman Ben Bernanke would have given to the House Financial Services Committee on Feb. 10, lies a unique and startling disclosure.
Hosted on the Federal Reserve’s own servers, the written testimony of the bank’s chairman explains in plain text what expanding the Fed’s powers will do.
“The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system,” footnote number nine, at the bottom of the page, explains without additional qualification.
Chairman Ben S. Bernanke
Federal Reserve’s exit strategy
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
February 10, 2010
9. The authority to pay interest on reserves is likely to be an important component of the future operating framework for monetary policy. For example, one approach is for the Federal Reserve to bracket its target for the federal funds rate with the discount rate above and the interest rate on excess reserves below. Under this so-called corridor system, the ability of banks to borrow at the discount rate would tend to limit upward spikes in the federal funds rate, and the ability of banks to earn interest at the excess reserves rate would tend to contain downward movements. Other approaches are also possible. Given the very high level of reserve balances currently in the banking system, the Federal Reserve has ample time to consider the best long-run framework for policy implementation. The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system. (emphasis mine)